YCharts announced Tuesday that it has added the ability for its advisor users to track and compare traditional assets to the 25 largest cryptocurrencies as measured by market capitalization.
CEO Sean Brown said that introduction of the crypto data — offered at no additional cost to users — came in response to advisors who reported increased requests for such data from their clients beginning late last year.
Once those requests “hit a critical mass,” Brown said, “we knew adding cryptocurrency data was something we had to add to our platform.”
While Brown said YCharts wasn’t aware that any of its advisor users were “recommending crypto to their customers,” he said that all advisors are “trying to decipher what buzzwords like blockchain, crypto and Bitcoin mean, and how they interrelate,” and are trying to understand “whether this is a viable investment alternative that they can put their recommendations behind.”
The action fits in with YCharts’ mission, Brown said, to “enable our clients to make smarter investment decisions” by providing them with data on investment alternatives so they can “quickly and easily analyze and compare investment alternatives.”
While not many advisors may be recommending cryptocurrencies, legislators, regulators and the courts have been considering — and in some cases taking action on — the virtual currencies. On March 6, a federal judge in New York ruled that the Commodity Futures Trading Commission (CFTC) can regulate virtual currency as a commodity. On March 7, the Securities and Exchange Commission ruled that trading platforms for digital assets like cryptocurrency must register, part of the Commission’s divisions of enforcement and trading and markets statement on Potentially Unlawful Online Platforms for Trading Digital Assets. On Wednesday, the House Financial Services Subcommittee on Capital Markets held a hearing at which attorney Robert Rosenblum testified that Congress should pass legislation soon that will “authorize and direct regulators to modify or eliminate regulations that needlessly impede the innovation and capital formation opportunities offered by the development of blockchain and cryptocurrency technologies” while also protecting investors and users.
And some advisors are looking closely at the role bitcoin and other cryptocurrencies may play in an investment portfolio. For example, Joe Elsasser of Covisum said he expects digital currency “will play a significant role in the future,” comparing it to biotechnology before the human genome was mapped, though he admits that for crypto, “the timeline under which this transformation happens is unpredictable.”
According to the YCharts statement on its new offering, Brown said that by making pricing data available in YCharts for cryptocurrencies such as Bitcoin, Ethereum, Ripple, Bitcoin Cash and Litecoin, advisors can use the data as “economic indicators in the digital asset market. Potential use cases include comparing Bitcoin ETFs to Bitcoin, understanding the potential risks and benefits of exposure to Bitcoin and comparing cryptocurrencies to other asset classes as part of a diversification analysis.
There’s also the potential to “compare cryptocurrencies to oil, stocks, bonds, etc. to check volatility,” the statement continued.
YCharts’ Brown wrote a series of blogs in 2017 for ThinkAdvisor, including 5 Symptoms Causing Advisors Pain.